Somerfield plc Company's performance and financial position.

COVENTRY UNIVERSITY

SCHOOL OF ENGINEERING

Postgraduate Engineering Programs

Financial Statement Analysis

Report on Somerfield plcs mathematical process

and financial position

MODULE LEADER: Mr. whole meal flour SARA

STUDENTS NAME: AMIN SAADAIE

Session date: 2004/05

TABLE OF CONTENTS

I- INTRODUCTION         3

II- PERFORMANCE         4

RETURN ON seat of government letter EMPLOYED (ROCE)         4

RETURN ON SALES (ROS) AND ASSET TURNOVER         5

GROSS earn MARGIN (GPM)         6

STOCK HOLDING PERIOD         7

DEBTORS DAY         8

CONCLUSION         9

III- FINANCIAL topographic point         10

CURRENT AND LIQUID (ACID TEST) RATIOS         10

GEARING RATIO         11

INTEREST COVER RATIO         12

CONCLUSION         13

IV- CASH mix         14

THE IMPORTANCE OF CASH MANAGEMENT         14

SOMERFIELD PLCS CASH FLOW         14

V- REFERENCES         16

VI- vermiform appendix         17

I- Introduction

The purpose of this report is to analyse the Somerfield plc Companys performance and financial position. In chapter II, the companys performance is labeld by profitability and efficiency ratios and some evidence are drawn. In chapter III, by relying on liquidity and appurtenance ratios, the financial position of the company is discussed. Finally, the importance of cash direction is described and the cash situation of the company is analysed in chapter IV.

The two competitors in the corresponding industry, which were the J Sainsbury plc and Tesco plc, were chosen for assessing the ratios. The outcomes of calculating same ratios for these companies were compared with a set of four-year trend in Somerfield plc Companys ratios.

In array to evaluate the ratios, all of them are benchmark against Time, Industry competitors and Expectations (TIE method).

II- Performance

Return On detonating device Employed (ROCE)

ROCE is one of the most important ratios for measuring performance of companies. The ratio expresses the relationship between the companys profit and total capital which is invested in the company. Therefore, the more ROCE shows that more profit has been generated by accredited amount of investment.

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